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MP3 of My Thumping Farm Subsidies on MetroFarm Radio

Michael Olson, the host of MetroFarm.com, and I had fun today thumping farm subsidies on his radio show this morning. He seemed perhaps nonplussed at my call in the final minutes to abolish all subsidies and to strip power from politicians across the board. But what the heck – at least Brazilian cotton farmers will like the show.

The Wall Street Journal
Wednesday, March 28, 1990
Our Taxing Tariff Code
—
Let Them Eat Lobster!
By James Bovard
In 1790, the U.S. Tariff Code consisted of a single sheet
of rates posted at Custom Houses; now, it occupies two hefty
volumes with 8,753 different rates. While the average tariff
now is only about 5%, hundreds of tariffs are still in the
Smoot-Hawley league — with some as high as 67%.

Why the blizzard of discriminations against and among
products? A cynic might say the Tariff Code is devoted to
encouraging the poor to raise their standards of living:

— Mink furs are duty free. With the money a mother saves
on her mink, maybe she can afford a polyester sweater —
which carries a 34.6% tariff — for her baby.

— Lobster is duty free. With the savings, struggling
parents may be able to afford infant food preparations, which
carry a 17.2% tariff.

— Orange juice’s tariff is 36%. But Perrier’s is only 0.4
cent per liter. (If the Customs Service reclassifies Perrier
as benzene, then it can enter duty free.)

— Footwear valued at not more than $3 a pair with rubber
or plastic outer soles and uppers is tariffed at 48%. If
valued at more than $12, the tariff is only 20%.

Congress also uses the tariff code to deny equal rights to
the malnourished. Vitamin B12, which is no longer produced in
the U.S., is hit with a 16.2% tariff, while vitamin B1
carries a 3.1% tariff. Vitamin C carries a 3.1% tariff —
while Vitamin E is hit with a 7.9% levy.

Some tariffs were raised early last year, when the U.S.
changed its tariff classification system to harmonize with
widely used international tariff categories. In 1988, the
rate on imported jams ranged from zero to 8.5%; now, the rate
varies from 3% on currant jam, to 10% (plus 15.4 cents a
kilogram) on cherry jam, to 20% on peach jam, to 35% on
apricot jam. This is one more telling bit of evidence that
the apricot jam cartel controls Washington.

The U.S. Trade Representative has submitted a plan to
offer tariff reductions during the current Uruguay Round of
negotiations under the General Agreement on Tariffs and
Trade. The Trade Policy Staff Committee, a group of staffers
from various federal agencies, held hearings on tariff reform
in November — and some of the pleadings from protected
industries were especially insightful:

— A producer of pimentos, tariffed at 9.5%, commented,
“The present tariff on pimentos is not an impediment to
imports and any reduction in the tariff would have an adverse
— even a disastrous — effect on the domestic industry.”

— Indiana Glass Co. complained that glasses from Mexican
companies were selling at K mart for $1.99 a set — while
Indiana Glass’s sets were selling at K mart for $3.99. As the
company’s brief noted, “There is absolutely no difference in
quality” between the Mexican product and Indiana Glass’s
product. Indiana Glass concluded that “this evidence of
[foreign] price advantage under current tariffs compels at
least the maintenance, if not increase, of tariffs [currently
up to 38%] on [such] glasses.”

— Bobby McKown of the Florida Citrus League declared:
“Many of our foreign competitors receive important government
assistance. U.S. producers receive none.” Mr. McKown must
have been carried away by his dedication to high tariffs. The
Agriculture Department has showered more than $30 million on
American citrus companies and organizations in recent years
to bankroll their foreign brand-name ads.

— The Committee to Preserve American Color TV gave a
presentation on why the U.S. should retain its 15% duty on
color picture tubes. The person who testified was Joseph
Donahue, a senior vice president of Thomson Consumer
Electronics, a subsidiary of Thomson S.A., the French
corporation that recently bought GE’s TV production
facilities.

Why does the U.S. have 8,753 tariff rates? Partly because
of the bargaining strategy followed by the U.S. for the past
half-century. As Washington trade lawyer Noel Hemmendinger
notes, there’s been a constant subdividing of tariff
categories to provide special rates for specific products
from nations that were offering to reduce the tariff rate on
some specific American export.

In the current GATT round, many nations favored working
for an agreement to cut all existing tariffs across-the-board
by 33%. But the U.S. preferred that nations haggle out
mutually acceptable tariff-rate cuts on a product-by-product,
rate-by-rate basis.

Our tariff code is part of our fossilized industrial
policy — perpetuating handouts for the biggest political
contributors to previous generations of congressmen. The
lethargy of our democratic system allows high tariffs to
remain long after the original beneficiaries have turned to
dust.

Tariffs are either a bailout to perpetuate uncompetitive
American industries, or a license for efficient American
industries to gouge their customers. It makes no sense for
the government to “improve” a level playing field by randomly
inserting hundreds of bumps, boulders and brick walls.
Regardless of what tariffs another country may have, it is
not in America’s national interest for the Customs Service to
selectively blockade our own ports.